Price Reports July 2023

The following information is provided by Plastics Information Europe.  For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read entire versions of the following reports, go to www.pieweb.com and sign up for a 48-hour free trial!

  Standard thermoplastics July 2023: More price cuts / Indications here and there of downtrend bottoming out / Only styrene polymers could turn around / Demand reaches low point during holiday season

PE: In the case of most polyethylene materials, producers had to bite the bullet in July and yield to converters’ pressure by granting them reductions that went significantly further than the fall in the cost of the monomer. Only a few HD and LLD types were able to extricate themselves almost completely from this trend. Many plastic film manufacturers have been reporting a machine utilisation rate of only 60%-70% for some time, but this has now been compounded by a lack of orders from the otherwise-crisis-proof packaging segments of foodstuffs and hygiene. As a reaction to the expected further weakening of demand in August, there is an increase in the number of reports about converters who intend to close down their production completely over the holiday season. This year, these shutdowns are also seeming to last longer than usual. Overall, the outcome will probably be that in the coming weeks only around half the installed film production capacity will be operating. Any firms that have not already done so are likely to carry out maintenance turnarounds in this period. 

PP: The downhill slide in PP prices seen in recent months continued in July 2023, with the same factors in play. Declining C3 costs – this time by EUR 50/t – and weak demand added further downward pressure on the market, though developments were not identical to those seen previously. Prices for co- and homopolymer grades moved in different directions due to the varied supply situation. Homopolymer for the most part exceeded the C3 reduction, while copolymer largely tracked the monomer. Also different from the recent past were sales tactics employed by several producers, who previously stopped taking orders in the second half of the month. If they were betting on a rise in the C3 prices – and a chance to increase their own demands – they may well have been disappointed. The upshot is that the August contract for the monomer is stuck in a rollover, and due to sluggish demand as the summer holidays shift into high gear, buyers are already demanding additional price concessions.

PVC: “No change is in sight”. The much-wielded phrase has featured prominently for many months now, and it happens to apply to the current reporting month as well. Prices for PVC continued their downward trend in July. Nothing has changed as far as the weak level of demand is concerned. The largest customer sector by a long way – the construction industry with its profiles and pipes – accounts for more than two thirds of the volume processed in Germany and is noticeably floundering. Ordering activity thus fell significantly below the normal level, with seasonal impulses reinforcing the trend still further as increasing numbers of converters departed on their summer break. And the falling cost of C2 has similarly confirmed this price trend. Sufficient material is available on the market, even if European production is only running at 60% capacity currently and fewer imports have been channelled into Europe of late. Imports were less attractively priced than previously, since prices have risen somewhat in the overseas markets. The overall situation is not set to change much in August either. Producers are likely to attempt to keep the price level stable, spurred on by the tailwind of the C2 rollover. Weak demand could, however, put a spanner in their plans.

Styrenics: Prices for styrenics trended down again in July 2023, maintaining the direction of the previous months. The course for new discounts was set by the decline in the styrene reference (down EUR 87/t). Weak demand and the associated oversupply led to price decreases that often exceeded the extent of cost reductions – especially for EPS, where quotations have been battered by the slump in construction for months. However, there are signs of a turnaround in August. Or at least, the cost development of the main precursor, styrene, is portentous. The relevant reference contract for August was not available by the editorial deadline; however, the sharp increase in spot prices suggests that the contract will shoot up steeply – and in its slipstream, quotations for styrenics are likely to be driven up sharply.

PET: The European PET market appears to have bottomed out in July 2023. After PX prices stabilised in June, suppliers demanded moderate increases at the start of the month. They were supported in this by the perceptible decline in import prices. Demand remained weak for the point in the season, but a number of converters began restocking their warehouses for the first time in several months. This prompted a slight revival, which was still at a low level. All in all, a rollover resulted in most cases at the lower end of the PIE range due to the impact of large volumes tied to feedstock prices. Customers taking small volumes at the upper end of the range, by contrast, achieved slight price reductions once again. Little momentum is in sight on the market side for August. Developments are thus set to be governed to an even greater extent than usual by the question of the PX contract price, which is currently subject to intense discussions. The outcome will most likely be somewhere between a rollover and moderate increases. For the August PX Asia contract, market participants there could not agree on a value. For the European contract, this suggests that these could also be difficult talks. A fix – usually retroactive in the last week of the month – is therefore likely to be a long time coming.

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

  Engineering thermoplastics July 2023: Weak demand, cheap imports send prices further down / Technical adjustments play a part / Price reductions likely in August

Market players will be happy to put July to bed. With all engineering thermoplastics, demand was weak, and it received an additional damper with the start of the holiday season. Many materials also experienced problems through competition from cheap imports. On top of this, there were technical adjustments for half-year agreements with, for example, the previously declared energy cost surcharges ceasing to play a role. Under these circumstances, prices came under considerable pressure, resulting often in triple-digit reductions.

Next month is not likely to be much better. The market is simply lacking positive impulses, and many converters seem happy to push off on holiday and leave their production facilities to the maintenance teams. Demand is therefore expected to remain weak, and the influx of imports is not receding either. Further price reductions for the engineering thermoplastics are therefore to be expected.

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 Polyurethane feedstocks July 2023: Downward trend set to continue in August / Full warehouses spur producers to underbid one another / Processors face short-time work, job cuts

Hardly any demand, a fixed contract for the precursor benzene that is down by EUR 79/t, and continued lively imports accelerated the erosion of isocyanate prices. Even for MDI, major customers were able to secure discounts of up to 300 EUR/t, and TDI was hard-hit too.

Despite production cutbacks in Europe, producers’ warehouses were well-stocked. This will remain the case due to the lack of outflow into the client sectors. Competition between producers is relentless, and sales volume is being prioritised over margins.

The client markets lack positive impulses. Instead, short-time work, lay-offs, and extended plant holidays are being discussed and partly already implemented across Europe.

August will see a continued downward trend for all reported products. Especially for TDI, the bottom is not even visible. Weak demand and cheap imports are weighing too heavily on negotiations. Initial offers to processors for August show significant price reductions once more.

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

  Composites/GRP July 2023: Styrene gain in August suggests end of resin declines / Glass fibre prices erode

In what may have been the monomer’s final tremor, the fall in the styrene contract drove resin prices down another notch in July. Some members of PIE’s panel of experts said the bottom may now have been reached. Indeed, by the third week of the month, there were still no market dynamics that would signal firming.

Due to soft demand, the turnaround in the price of the principal feedstock styrene may not have immediate repercussions. While the EUR 108/t gain was substantial, it seems unlikely that this will influence pricing trends significantly, especially as at the height of the summer holidays there are no positive signals coming from the market. In the wake of the increase, converters will order cautiously. Surprisingly, only the premium automotive sector has enjoyed any substantial demand recently.

After relatively sharp declines in glass fibre prices seen at the beginning of the year’s second half, the downward momentum may well have bottomed out. Only minor – if any – changes in costs appear likely. Price momentum for assembled roving is harder to forecast. Currently, this segment is being pulled downward by slack demand for engineering compounds.

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 Standard recyclate July 2023: Sharp discounts continue across the board / Slack demand as holidays begin / Concerns rise over off-spec imports / Price slide expected to extend

It can always get worse. The effects of the holiday season became increasingly noticeable in July 2023, with demand in Europe becoming even more slack than in the already weak previous month. In addition, several materials struggled to compete with low-priced virgin material offers and/or imports, leading to a very uniform price trend in July: lower, again. The downward spiral even gained momentum for most materials. In other words, the discounts were even higher than in the previous month, in most cases.

The signals for the coming month do not indicate change. In August, too, sunny seaside days will lead to a rather meagre order intake. Therefore, recyclate prices will trend further downwards across the board in the weeks to come, especially as off-spec materials and imports continue to cause severe problems for several recyclate grades. The situation is especially dire for rPET. Not only is the quantity of cheap imports from Asia inciting sorrow, but quality is also of concern.

Although it is unclear whether the Asian materials – sometimes used in food contact applications – are meeting European standards, there is no sign of the EU taking action. The European rPET industry therefore risks severe and permanent damage.

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 Engineering recyclate July 2023: Asian imports drive European market / Sizeable cuts likely in August / Moves to build stocks have positive effect

Cheap Asian imports once again dictated prices in July and disturbed the rather peaceful situation otherwise prevailing on the German market. For some types, European material on its own would have led to at most minor price reductions, but converters able to use imported material often paid between EUR 200/t and EUR 400/t less than for European product.

This pushed most prices in this report down considerably. Here and there, recyclers recognised the signs in good time and offered lower prices to keep imports at bay.

The material most affected by price reductions was polyamide 6.6, which is additionally suffering from substitution. Aggressively priced imports are expected to further impact the generally long market. A continuation of the price erosion is to be anticipated until the previously normal gap to the sister product PA 6 is restored; the difference is at least EUR 200/t above the usual gap to PA 6. Only then is a certain amount of normalisation likely. Many recyclers are considering, in view of the heavily declining demand, removing PA 6.6 completely from their portfolios. Some reports say sales are down 70% from last year.

Despite the holiday season, a start to stock-building plus relatively lively demand are keeping ordering activity stable. Converters – especially from the automotive sector – have less fear of order postponements than in previous months. In fact, converter confidence in a more consistent ordering pattern has at last resulted the beginning of stock-building.

Nevertheless, further significant price reductions are likely with some types. Exceptions are recyclates based on ABS, PA 6, polycarbonate and polypropylene, where more modest price cuts are expected.

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!